Salary Sacrifice vs PCH Calculator
Both salary sacrifice and PCH are lease-style arrangements where you never own the car. But salary sacrifice offers significant tax savings on an electric vehicle. Enter your details to see which works out cheaper.
Frequently asked questions
How do salary sacrifice and PCH differ?
Both are lease-style arrangements where you return the car at the end. The key difference is tax: salary sacrifice deducts payments from your gross salary, saving income tax and NI. PCH payments come from your net (after-tax) pay, so there is no tax benefit.
Is salary sacrifice always cheaper than PCH?
For electric vehicles, salary sacrifice is almost always cheaper because the tax and NI savings typically outweigh any difference in the headline lease price. Higher-rate taxpayers save the most. The salary sacrifice lease also usually includes insurance and maintenance, which PCH may not.
Can I get any car on salary sacrifice?
No. Salary sacrifice is offered through your employer and the available cars are limited to the scheme provider's list. Most schemes focus on electric vehicles because the 2% BIK rate makes the tax saving most attractive. PCH lets you choose from any car available from leasing brokers.
What if I need to end the agreement early?
Both have early termination penalties. Salary sacrifice exit costs are defined in your scheme agreement and may be triggered if you leave your employer. PCH early termination typically costs around 50% of remaining rentals. Check both contracts carefully before committing.
Does salary sacrifice affect my mortgage application?
Yes, it can. Salary sacrifice reduces your gross salary on your payslip, which some mortgage lenders use to assess affordability. However, many lenders now understand salary sacrifice and will use your pre-sacrifice salary. Speak to a mortgage broker if this is a concern.
These calculations are estimates based on 2026/27 HMRC and DVLA rates. Speak to a lender or qualified financial adviser for a personalised quote.